Wall Street’s post-FOMC rally ended after less than 24 hours as a plethora of central banks from around the world followed the Fed’s lead and hiked interest rates. The S&P 500 closed 3.24% lower, the Nasdaq slumped by 4.08%, and the Dow Jones fell by 2.37%. In Asia, US futures have rallied on some short covering with S&P 500 futures rising 0.60%, Nasdaq futures gaining 0.90%, and Dow futures have added 0.40%.
The rally in US futures today has taken the edge off the bearishness in Asia, most of the region is in the red. Japan’s Nikkei 225 has fallen by 2.0%, with South Korea’s Kospi down 1.25%. In Mainland China though, markets have once again mysteriously and abruptly reversed early losses, suggesting China’s “national team” is around. The Shanghai Composite is now unchanged for the day, while the CSI 300 is now 0.25% higher, and Hong Kong has risen by 0.35%.
In regional markets, Singapore is unchanged, while Taipei has lost 1.30%. Kuala Lumpur has fallen by 1.35%, with Bangkok down 0.30%, Jakarta slumping 1.70%, and Manila retreating 1.50%. Australian markets have remained laser-focused on Wall Street’s main session and are deeply in the red. The ASX 200 and All Ordinaries have slumped by 2.25%.
European markets had the SNB rate hike to contend with, as well as a weak Wall Street session, leaving them deep in the red overnight. The price action in Asia will give Europe no reason to turn bullish today, and ahead of weekend risk, are likely to start the day lower once again. In the US, a holiday Monday and huge option expiries today mean it might be best avoided altogether.
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